I'm packing up my big honkin' SUV tomorrow with my oversized family of 5 and driving 280 miles (one-way) to Lake Cumberland, Kentucky to visit with friends from Atlanta--who will be driving their oversized family of 5, 330 miles (one-way) in their big honkin' SUV. Based on the paltry gas mileage we will get--about 18 mpg--I'm figuring our family will consume about 31 gallons of gas.

At $3.50 a gallon that's $109. If we could somehow double our fuel efficiency to 36 mpg and still fit the family we would save $54 in fuel cost round trip*. For a 4.5 hour one way trip, we are paying an extra $6 per hour to drive the SUV.

So I ask myself, am I willing to pay $6 per hour to have my 3 kids separated by 2 feet each--two in the middle row, one in the back--rather than be touching each other the whole trip.

Ummm...can I get a big 'Hell Yeah'?

*For those of you wondering who will pay for the externalities I create, that's an easy one...YOU. That's why they're called externalities. Voluntarily internalizing my own externalities would ruin my faith in rationality and cause me to have to completely reinvent economics. I'm just too lazy for that right now. Yes, I'm a jerk.

First of all, a big 'Hell Yeah' for Tim. Secondly, I have to protest at his self-characterisation: he is most definitely not a jerk. You can be the most passionate advocate for the need to do more to protect the environment - Al Gore, please stand up - and still happily go on to consume ridiculous amounts of energy. (Al Gore, please refrain from sitting down)

The two are not at all inconsistent: The former is a public policy preference, while the latter relates to private preferences given public policy.

When I am asking for higher taxes on gasoline, I want them imposed on everyone, not just on me. What's the point of unilaterally deciding to cut my consumption of gas? The planet will not even notice.*

This principle is very well understood in a different, but analytically equivalent, setting: general taxation. If I am asking for higher taxes but the government instead decides to go for a tax cut, will anyone in their right mind ever blame me for not voluntarily paying more than my fair share into the public coffers? Is it hypocritical that I pay the universal 'low' rate of tax while I am the most passionate of advocates for higher rates?

* Ah, I hear you say, but what if a sizable minority of conscientious citizens (for it is a minority, otherwise it would include the all-powerful median voter) all decide to voluntarily reduce their carbon footprint? Well, that's just great: they just reduced the pressure on the not-as-conscientious median voter to do something about it by imposing a universal pigouvian tax (or other mechanism to internalise the externality).

And if that's not clear, think of my general taxation example. If the median voter knows that the higher the size of the deficit the more some citizens will voluntarily chip in, how do you think his decision on the size of the deficit will be affected? Yes, you conscientious citizens, you just made running a larger deficit the most appealing proposition.

Update II: Tim Haab (who is not a jerk) definitely gets Kevin Drum's point as he clearly understands the fundamental difference between a) advocating policy which causes people to internalize externalities and b) listening to kids in the back seat squabble for hours. Also he doesn't own any slaves which puts him a big one up on Thomas Jefferson.

An interesting example of rational co-operative behavior which is not in the public interest is link begging, where bloggers attempt to reward other bloggers for links by linking back. Not as repulsive as self linking, but the first sometimes enables a rational egoist to trick Google, while the second is just pathetic.

Kevin Drum's point is this:

To consider with Drum the case of Thomas Jefferson, without anything odd (dynamic inconsistency) the position as a slave owner who advocated abolition of of slavery can be perfectly rational. The slave owner might hate slavery, but not hate the enslavement of his own slaves as much as he loves living in luxury off the sweat of their brows. His ideal outcome would be to have all slaves but his own free. A rational anti slavery slave owner knows he's not going to get away with that. Second best would be abolition of slavery -- the desire to free everyone elses slaves outweighs the desire to keep his own. Third would be continued slavery. Finally the outcome he likes least would be to free his own slaves and live in relative poverty in a slave owning country.

Before leaving this post (again), note that Drum's point is narrower that the the one made here. My argument is not only that Tim's behaviour is rational, but also that it is moral (something that cannot be said for slavery, as polution is a question of a not very well defined 'how much', while accepting slavery is a very clear 'if'). Furthermore, there is a possibility that driving a gas eating monster may actually be beneficial to the environment.

More on this counterintuitive point tomorrow, in response to a reader's request for clarification with regards to the last paragraph of my main post.

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This blog reflects my personal views and is in no way representative of those of my employer or my mum. To make sure no misunderstanding arises and their lives stay stress-free, I will remain anonymous.